Purecircle Share Discussion Threads

[felix99] 18/11/2009 14:27

closed my short at £2 ages ago . I was even long at 198 but bottled out when bounce never happened :-).

Looks a good short in the making again in due course - but as you say up is the way today !

[sheeneqa] 18/11/2009 13:47

Better leaving the fundamentals to Warren B and stick to trading what you see, the pros like it, eos.........

Better get those shorts bought! Nice chatter about this little company.

[cestnous] 18/11/2009 13:26

Wewll the market likes it and so do I. This heralds further steady share price increase imo.

[yf23_1] 18/11/2009 12:56

"Considering their sweetening capacity and the favourable physical and functional attributes, natural stevia-based sweeteners are compatible for use in a wide array of foods, beverages, and dietary supplements. Even so, significant flavour technology support is needed to produce an acceptable or superior tasting final product with stevia. This calls for an end user with technical know-how or a supplier who has the technical expertise to produce a customised tasteful product. "

[felix99] 18/11/2009 11:54

you my as well burn the $25m now and get it over with - I'm no marketeer but it just sounds like they are pi$$ing into the wind trying to do that.

They are obviously trying to create an "asparthame" type of brand for stevia and to get the market to accept theirs and dump all the alternatives. Just not going to happen in this day and age unless their version is so unique in taste experience over competitors or health wise.

As far as I can see all the different brands are basically the same thing and the taste just comes from the particular recipe Pepsi or whoever come up with to mix with it. Health benefits don;t seem to have USP from one brand to another of stevia.

At end of the day it will be down to price and volumes and you are much better off spending the $25m low balling for contracts and running competitors into bankruptcy than spedning it on a brand. Maybe thats the real plan but they can;t say that :-).

This just reminds me of Clipper Windpower over and over. great potnetial , raising oodles of money constantly to realise that potential and then find at the end of the day the product is suddenly uneconomic or fallen out of favour or their are other products on the market which people move to.

[bubble pricker] 18/11/2009 10:09

raising money to spend on marketing usually sets off red lights and alarm bells in my mind. Especially as the marketing is to "raise consumer awareness of the benefits of stevia". It seems silly to waste money on promoting the generic product class rather than the specific brand. The equivalent in the aviation industry would be for BA to run an advertising campaign encouraging people to fly more.

[eakin] 18/11/2009 09:08

Looking to buy in Simon?

[simon cawkwell] 18/11/2009 09:03

Finncap today:

PureCircle – PURE.L – (207.5p) – A somewhat surprising placing to raise $65m net

PureCircle has announced a Placing of 20m shares at 200p, a discount of 3.6% to last night's closing price. This increases the equity base by 15.1% (an estimated 9.2% in terms of the average equity base for the year to end June 2010) and raises £40m gross or circa $67m which will be some $65m net of costs. The latter figure compares with net debt of $47.5m at end June 2009. The Placing has been "substantially oversubscribed". There may be raised eyebrows as PureCircle management had indicated with some vigour that it had adequate funds to complete the current supply chain expansion (due for completion at end calendar 2009). However, this is a different matter in that a further strengthening of the supply chain is planned (including a new stevia extraction facility in Paraguay where work will commence in early 2010/11 plus the holding of larger finished goods inventories in all key markets) as well as a major ($25m) marketing campaign in 2010 intended to raise consumer awareness of the benefits of stevia. The timing to the Placing seems somewhat odd though as the group had indicated previously that a) it has a market appraisal programme to evaluate the scope of Reb-A that is only likely to be completed in early 2010 and b) that adoptions of Reb-A in new food and beverage products are likely to be skewed to the start of calendar 2010. So is there already visibility of these new products in mid November that did not exist at the time of the preliminaries on 23rd September? The Placing does however suggest increased management confidence in the potential of Reb-A and the liquidity of the shares will be improved. On the negative tack, there must be some EPS dilution and $25m on a marketing and branding campaign in 2010 looks a large roll of the dice. HOLD pending extra information from the company.

Finncap advise to hold. But I cannot begin to understand why. Finncap are dead right about the surprising consumption of cash. And How. Sell as fast as you can.

Simon Cawkwell

[sleveen] 18/11/2009 08:30

well Mr Market seems to like it, the placing presentation must have been a humdinger.

[fegga] 18/11/2009 07:45

sleveen , i had the same reflex having recently bought, but am more disposed towards adding now.

[sleveen] 18/11/2009 07:39

I agree fegga. When I saw the placing notice I thought current shareholders would be vastly diluted (traditional in most placings of late)but this is not the case with PURE.

A good sign IMHO.

[fegga] 18/11/2009 07:31

interesting listing price at 2.00 - only 7p discount to current price - it seems that those subscribed deem it to reasonable price. i would have thought that is a very positive sign but wdik?

[fegga] 16/11/2009 09:15

thanks angus.

nestlé on board - momentum gathering it seems... string of early buys this morning.

i'm in.

[sleveen] 16/11/2009 08:15

yet another good news RNS

[sleveen] 13/11/2009 18:49

good post angus

[onlyfoolspoker] 13/11/2009 14:27

PureCircle Limited ('PureCircle' or 'the Company')
PureCircle wins prestigious Global Natural High Intensity Sweetener Market
Leadership Award


PureCircle (LSE: PURE), the world's leading producer of Natural High Intensity
Sweeteners, including Reb-A, is pleased to announce it has been awarded the
prestigious Global Natural High Intensity Sweetener market Leadership Award by
leading international research organisation Frost and Sullivan.
Frost and Sullivan's Director of UK Operations, Gary Jeffrey, said: "PureCircle
has created a global footprint for Reb-A. Its large vertically integrated supply
chain, global reach, international regulatory compliance and strategic
partnerships across the world have set a new benchmark for natural sweetening,
and clearly support PureCircle's position as the undoubted leader in the Natural
High Intensity Sweeteners Market".


PureCircle Director of Sales and Marketing Peter Milsted commented: "We are
delighted to be recognised for the key role that PureCircle has achieved in
working with the world's leading food and beverage companies to accelerate
commercialisation of natural zero-calorie sweeteners".

[angusf27] 13/11/2009 13:46

Interesting post.

Global brand quality Reb A is usually protected by a suite of process patents and not quite so easy to refine. Leaf yields, proprietary strains, contracted volume leaf sourcing, farmer training, application expertise, international certifications, global diversification, effective sales and marketing front end, flavour know-how, biotechnology, R&D, patent/legal expertise, sustainability and fair trade programs, customer trust and reputation (this is very important at brand level) and strategic alliances at every stage of the supply chain.

A $200m+ million dollar investment is required to begin to compete at global level. True barrier to entry is high and project would be resource hungry. First mover advantage is worth 3-5 years in this market and the gap is widening as the quality taste/bar is continuously being raised.

[fegga] 13/11/2009 13:03

i'm watching too as it happens

[bubble pricker] 13/11/2009 12:48

Thanks fegga.

The articles are about Stevia generally. Assuming for a moment that Stevia (as a generic product) will gain market share, then one could make a case that this tide is likely to raise all boats and therefore Pure Circle's sales will increase.

However, this is by no means guaranteed. As the market for Stevia grows, it will attrract new players. Anybody can refine Reb-A extract. There is nothing particulary special about Pure Circle. Coca Cola is a huge player and if Stevia takes off, then they can easily muscle a small player like PURE out of the way. Similarly, the likes of Tate & Lyle, once the market for Stevia is big enough, can do the same. It appears to me from what I have read that PepsiCo are currently purchasing Reb-A extract from PURE. But that could change at any time if PepsiCo can find the product cheaper elsewhere. In fact, as the market share of Stevia grows, a big player like Pepsi will almost certainly want diversity of supply and not be dependent on one supplier only. The "PureVia" brand is owned by PepsiCo, not by PURE, and if Pepsi one day decides to buy from someone else, PURE has nothing.

The bottom line is, Stevia is a free for all market, which will become highly competitive and ruthless once it becomes big enough to attract the interest of big boys. PURE will have to remain on their toes at all times in order not to be caught out.

The present P/E already prices in signifanct increases in turnover, which first need to be delivered and secondly need to be translated into higher net revenue and positive cash flow. Looks overvalued to me at present, but not so badly overvalued that I would call it a good shorting opportunity. I will stand back and watch.

[fegga] 13/11/2009 12:23

also this article:

[fegga] 13/11/2009 12:04

succinctly put yf.

[bubble pricker] 13/11/2009 11:47

Can someone please explain?

Pure Circle makes products derived from Reb-A extract. Anyone wishing to do so can do the same thing. And indeed they are: Reb-A extracts have been marketed since 1971. Coca Cola markets its version under the brand name "Truvia". There are many other players doing the same thing. There is nothing particular about Pure Circle's products. It is simply competing with others on an identical product.

Pepsi Co's brand name for the Reb-A extract is "PureVia". This trademark is jointly owned by PepsiCo and a subsidiary of Merisant, so again Pure Circle owns nothing in this respect.

As far as I can see, Pure Circle does nothing and owns nothing that others cannot do and are doing. It is essentially a trader of the Reb-A extract in a competiive market. So why is this company valued at a PE of 23?

[mjneish] 06/11/2009 11:43

Yes I am looking at the correct year.

If, let's say, sales double this year (and it's a pure guess of course, because I have absolutely no idea), and the gross margin remains the same, and admin expenses remain the same in proportion to sales, we are looking at a forward PE ratio of about 13.6. The historic PE ratio is 24.

It looks a lot better on this basis, but of course it assumes a doubling in sales, hence my comment that there's quite a bit of optimism already built into the price. Can anyone provide any projected figures from a broker or from management itself? Thanks.

(EDIT) Just saw the figures in the header ... these figures are already quite old. Is there a more recent estimate?